RIM

WATERLOO — Thorsten Heins says he only agreed to take on the daunting job of turning around Research In Motion because there was “a core of innovation” inside the company that showed a “path to the future.”

Reversing the slide is “hard anywhere” when a company begins to falter, RIM’s chief executive officer said in a meeting with the Record’s editorial board Wednesday.

Laying off employees, abandoning product lines, upsetting customers and changing the culture of a company are “very, very stressful,” he said at RIM’s corporate headquarters in Waterloo.

He’s been through it twice before at his former company, the German engineering and electronics giant Siemens, and learned from the experience, he said.

He’s seen many turnarounds where managers do all the right things — slashing costs, reducing headcounts, building efficiencies into the process.

But “if you don’t have a core that allows you to move forward, you’re going to get stuck halfway down the road,” Heins said.

Looking tanned and relaxed despite circling the world four times in recent months promoting the company’s new BlackBerry 10 smartphone, it was a clearly ebullient Heins who arrived for the meeting Wednesday.

Earlier in the week RIM finally announced a release date for its long-awaited device. The survival of the company is largely riding on the new handset, which will be unveiled to the world on Jan. 30.

The spark of innovation he saw at RIM was the operating system acquired by the BlackBerry-maker when it purchased QNX Software Systems more than two years ago, Heins said.

Used in automobiles, internet networking systems and casinos, the QNX platform is known for its mission-critical capability and more versatile operating system.

Pointing out the window to another RIM building, Heins said he still remembers the day he sat down with RIM co-founder and former co-chief executive Mike Lararidis and other top company officials.

At that meeting, it was decided they had to build a whole new operating system for the BlackBerry smartphone, an arduous task that would take more than two years, he said.

“We had Dan Dodge (QNX founder and chief executive) in the room and we knew it was a fantastic OS (operating system). That’s exactly what we needed. We decided . . . we have to build our own platform.”

During the meeting, Heins demonstrated many of the new smartphone’s features, including the BlackBerry Hub, which gathers together all the message programs such as corporate and personal email, Facebook, Twitter, LinkedIn and the like.

It’s possible to be deep into a game on the device, then peek into the hub to view a message while not shutting down the game, he noted.

Vivek Bhardwaj, a senior product manager at RIM, showed off the device’s “predictive typing” capability, which creates words based on the first few letters typed by the user. Switching to a different language can be accomplished by punching one key and words can be deleted by simply sliding the thumb to the left.

The device can also be woken up from sleep mode by simply sliding the thumb up the screen, Heins noted. It’s all about “peek, hub and flow,” he said.

When he took over as chief executive earlier this year, Heins was bombarded with advice to abandon the aging BlackBerry platform and adopt the Android operating system powering some of the top smartphones on the market today.

But Samsung rules the Android world today and other companies in that camp like HTC and Motorola are struggling “because there is no differentiation,” he said.

Telecom carriers like Verizon or Rogers wouldn’t talk to RIM today if it was just another Android device, he said. They already have plenty of Android devices in their network.

“They talk to us because we have a different value proposition for them. We offer choice and not a me-too device.”

“In hindsight, I am so happy to sit here and not show you an Android product,” he added.

Asked if RIM is past the crisis point yet, Heins said it has passed that point internally. The company has a new direction and new leadership and the various teams “know what they have to do.”

In financial terms, he has managed the business prudently with the goal of trimming costs by $1 billion by 2013 and keeping a lid on capital expenditures, he said.

But the crisis point won’t be over until RIM achieves a turnaround in the market and becomes profitable again, he said.

RIM couldn’t abandon the consumer market and concentrate on the business segment as many have suggested because of the “bring your own device” to work trend, Heins said.

Many companies are allowing employees to use their own devices at work and RIM had to be on the list of approved devices, he said.

To that end, the BlackBerry 10 operating system creates a clear division between work and personal domains, he said. Each has its own set of applications that can’t be transferred from one domain to the other, a functionality made possible by the QNX operating system, he said.

If an employee leaves the company, the chief information officer can simply wipe the work domain and apps from their device, Heins noted.

One of the reasons BlackBerry’s image has suffered against the iPhone in recent years is because apps and programs were tightly controlled on company-issued BlackBerrys. Meanwhile, iPhone users had access to a whole range of other apps and services, he said.

The other problem was an aging BlackBerry operating system that was built primarily as a messaging and email device with a closed architecture that was not accessible for outside apps developers.

“It served its purpose for 15 years and made this company a $20 billion company. But it doesn’t take us through the next 10 years.”

Asked how he can turn around the chorus of negative sentiment from stock analysts that has plagued RIM over the past few years, Heins said the company has shown the BlackBerry 10 phone to analysts and carriers in private and they are “excited.”

On the same day that one U.S. analyst made headlines last week by saying the BlackBerry 10 would be “dead on arrival,” two other analysts gave RIM’s stock a buy rating, Heins said. But their comments were largely ignored.

The U.S. media is quick to turn a company from “hero to zero” and vice versa, he said. “It’s more important what the customers are telling me,” he noted, adding “the best proof is to deliver.”

RIM isn’t planning a huge TV ad campaign in the weeks leading up to the BlackBerry 10 release on Jan. 30, Heins said.

Instead, it will use a “below the line” strategy of sending out video clips of the platform’s keyboard, flow and multi-tasking functions to bloggers and on-line reviewers. Ads will be pushed to other smartphone users asking them “can your device do this?” he said.

Only when the BlackBerry 10 is finally released will the “fireworks above the line” be seen in the form of big TV ads, Heins said.